India is poised to become the epicentre of global oil demand growth over the next decade, according to a new report released by the International Energy Agency (IEA). The country’s rapidly expanding industrial base, transportation network, and rising energy needs are expected to make it the largest contributor to oil demand growth globally by 2030.
India to Lead Global Demand Expansion
The IEA report highlights that India will account for more than 30% of the incremental global oil demand growth between 2023 and 2030 — surpassing China as the world’s fastest-growing oil consumer.
This trend is being driven by:
Expanding industrial output and manufacturing capacity.
Increased vehicle ownership and road transport demand.
Rapid urbanization and population growth.
Growing aviation and logistics sectors.
“India is entering a new phase of economic development where energy demand, particularly for oil, will grow strongly as millions join the middle class,”
said Fatih Birol, Executive Director of the IEA.
Industrialization and Transport Driving Consumption
The report attributes much of India’s oil demand growth to the transportation sector, where rising personal mobility, freight movement, and aviation fuel requirements continue to surge.
Road transport is projected to account for nearly half of India’s total oil consumption by 2030.
Petrochemical feedstock demand, used in plastics and manufacturing, will also expand significantly.
Diesel and gasoline consumption are expected to remain the largest contributors, even as the country gradually transitions toward cleaner fuels and electric mobility.
According to the IEA, India’s oil demand is expected to rise from 5.3 million barrels per day (mb/d) in 2024 to nearly 7 mb/d by 2030.
Refining and Import Dependence
India currently imports over 85% of its crude oil requirements, making it one of the world’s largest importers. To meet future demand, the country is expanding its refining capacity and strategic petroleum reserves.
Several major infrastructure projects — including expansions by Indian Oil Corporation (IOC), Reliance Industries, and HPCL-Mittal Energy Ltd (HMEL) — aim to raise India’s total refining output to over 270 million tonnes per year within five years.
“India’s refining and storage expansions are crucial to meet both domestic consumption and its ambition to become a regional energy hub,”
the IEA noted.
Energy Transition Still on Agenda
Despite the anticipated growth in oil demand, the IEA emphasized that India remains committed to clean energy goals and decarbonization.
The government’s National Green Hydrogen Mission, ethanol blending targets, and push for electric vehicles (EVs) are part of a long-term effort to reduce dependence on fossil fuels.
However, experts believe the energy transition will occur gradually, with oil and gas continuing to play a major role in India’s energy mix through the 2030s.
Global Context
Globally, the IEA forecasts that oil demand will plateau in the 2030s, as renewable energy and EV adoption accelerate in advanced economies.
Yet, emerging markets like India, Southeast Asia, and Africa will continue to drive consumption growth due to population expansion and rising incomes.
The agency also warned that geopolitical tensions, supply chain disruptions, and price volatility could challenge the pace of global oil market stability in the coming years.
Policy Implications for India
The report recommends that India:
Diversify its import sources to reduce geopolitical risks.
Continue investments in domestic exploration and refining capacity.
Balance economic growth with emissions targets.
Enhance strategic reserves and pipeline infrastructure to ensure energy security.
The IEA lauded India’s leadership in the International Solar Alliance (ISA) and its progress toward achieving 50% renewable energy capacity by 2030, but noted that oil will remain a key energy driver during the industrial expansion phase.
Conclusion
With industrial growth accelerating and transport needs rising, India is firmly on track to become the world’s largest driver of oil demand growth over the next decade.
The IEA’s latest projection underscores India’s dual challenge — meeting surging energy requirements while balancing climate commitments.
As global markets evolve, India’s energy policy decisions will increasingly shape the trajectory of global oil dynamics and influence long-term energy security strategies worldwide.
FAQs
Q1. What did the IEA report say about India’s oil demand?
A: India is projected to become the epicentre of global oil demand growth by 2030.
Q2. How much oil does India consume?
A: India’s oil demand is expected to rise from 5.3 million barrels per day in 2024 to about 7 mb/d by 2030.
Q3. What sectors drive India’s oil consumption?
A: Transport, industry, and petrochemicals are the main contributors.
Q4. Is India reducing its oil dependence?
A: India is expanding renewable and EV adoption, but oil will remain central to its energy needs through the 2030s.
Q5. What is India doing to ensure energy security?
A: The government is boosting refining capacity, diversifying imports, and developing strategic petroleum reserves.
Published on : 12th November
Published by : SMITA
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Source Credit: Reported by NDTV